SPV FOURTH QUARTER February Jan Erik Kjerpeseth Managing Director

Transcription

1 SPV FOURTH QUARTER 6 February 2014 Jan Erik Kjerpeseth Managing Director

2 4 % 4 % 9 % 10 % 12 % 13 % KEY DEVELOPMENTS FOURTH QUARTER AND 700 3,5 % ,00 % Mkr ,71 % 1,73 % 1,72 % 1,47 % 1,51 % 1,46 % 1,44 % 1,39 % 1,43 % 1,52 % 1,44 % 1,42 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Q1 Netto rente- og kredittprovisjonsinntekter mkr Q2 Q3 Q4 Netto rente- og kredittprovisjonsinntekter % per kapitalenhet 3,0 % 2,5 % 2,0 % 1,5 % 1,0 % 0,5 % 0,0 % Pr kapitalenhet % p.a. Stable development in net interest ,13 % 3,74 % 3,83 % 3,85 % 3,83 % 3,83 % 3,68 % 4,00 % 3,54 % 3,00 % ,00 % 1,32 % 1,26 % 1,22 % 1,37 % 1,34 % 1,29 % 1,21 % 1,22 % 1,00 % 0,37 % 0,32 % 0,34 % 0,24 % 0,29 % 0,30 % 0,24 % 0,24 % Q1 Q2 Q3 Q4 Personmarked Bedriftsmarked Personmarked, andel av segmentet Andel av total portefølje Bedriftsmarked, andel av segmentet 0,00 % Increased write-downs Targeted cost initiatives produce results 14,0 % 12,0 % 10,6 % 11,2 % 11,2 % 11,7 % 12,4 % 13,0 % 10,0 % 9,6 % 8,0 % 6,0 % 4,0 % 2,0 % 0,0 % Ren kjernekapitaldekning Basel I-gulv Prognose ICAAP ren kjernekapitaldekning Basel I-gulv Kombinert minimumskrav og bufferkrav ren kjernekapital Capital accumulation according to plan Proposed dividend of NOK 3.0 2

3 KEY FIGURES Key figures fourth quarter and 4Q 4Q 2012 YTD YTD 2012 Pre-tax profit 246 MNOK 547 MNOK MNOK MNOK Profit per equitiy certificate 1,33 kr 2,72 kr 6,13 kr 6,57 kr Net interest (annualised) 1,71 % 1,51 % 1,67 % 1,45 % Cost ratio 1) 43,9 % 60,4 % 48,8 % 58,0 % Return on equity (annualised) 2) 9,8 % 21,9 % 11,7 % 14,1 % Proposed dividend per equity certificate 3,0 kr 2,5 kr 3,0 kr 2,5 kr Payout ratio 6,6 % 8,5 % Core Tier 1 (Basel I - floor) 11,2 % 10,6 % 11,2 % 10,6 % Core Tier 1 (IRB) 14,2 % 14,0 % 14,2 % 14,0 % 1) Cost ratio exluding on-offs related to change in pension scheme in 2012 (313 MNOK) 3

4 KEY FIGURES EQUITY CERTIFICATES PROPOSED DIVIDEND OF NOK 3.0 Return on equity after tax (%) Profit per equity certificate (NOK) Book equity per equity certificate (NOK) Q4 13 9,8 % Q4 13 1,33 Q ,7 Q ,0 % Q3 13 1,85 Q ,9 Q ,7 % Q2 13 1,62 Q ,0 Q ,4 % Q1 13 1,33 Q ,6 Q ,9% Q4 12 2,72 Q ,7 4

5 CHANGE IN PROFIT PERFORMANCE FOURTH QUARTER

6 CHANGE IN PROFIT PERFORMANCE

7 OVERALL GROWTH IN LENDINGS IN LINE WITH CAPITAL PLAN GROWTH IN CM SOMEWHAT LOWER THAN EXPECTED IN Retail market Deposits: NOK 37 bill. Lendings NOK 85 bill. Corporate market Deposits: NOK 26 bill. Lendings NOK 28 bill. Total Deposits: NOK 62 bill. Lendings NOK 113 bill. Growth deposits 7,8 % Growth deposits -2,0 % Growth deposits 3,6 % Growth lendings på 7,2 % Growth lendings -1,1 % Growth lendings 5,0 % Target lendings 6,0 % Target lendings 2,5 % Target lendings 5,0 % K2 7,0 % K2 3,7 % K2 6,0 % 7

8 HIGH, STABLE NET INTEREST IN THE FOURTH QUARTER REPRICING HAS HAD AN EFFECT IN RELATION TO STATED TARGETS Development in net interest and credit commission income Comments NOKm ,42 % 1,44 % ,39 % 1,43 % 1,52 % 439 1,44 % 458 1,46 % 478 1,51 % 459 1,47 % 549 1,72 % ,73 % 1,71 % 3,5 % 3,0 % 2,5 % 2,0 % 1,5 % 1,0 % 0,5 % Per capital unit % p.a. Nominal net interest up by NOK 102 million compared with the fourth quarter the year before primarily as a result of repricing and lower financing costs Repricing in the first half-year reflects more stringent capital requirements and increased risk weights on housing loans 0 Q Q Q Q Q Q Q Q Q1 Q2 Q3 Net interest income and credit commisions (NOKm) Net interest income and credit commisions per capital unit (% p.a.) 0,0 % A fee of NOK 13 million to the Norwegian Banks Guarantee Fund was charged to net interest income in the quarter corresponding to minus 4 bp 8

9 MARGINS: STABLE ON LENDINGS AND A FALL ON DEPOSITS 3-MONTH NIBOR DOWN 4 BP FROM THE PREVIOUS QUARTER Lending margins on a par with the previous quarter Deposit margins down 3 bp for CM and down 6 bp for RM from the previous quarter 4,00 3,50 3,40 3,30 3,29 1,00 0,80 0,63 0,82 0,77 3,00 2,50 2,00 2,28 2,18 2,23 2,90 2,69 2,69 2,20 1,73 1,89 1,96 2,94 2,92 2,44 2,17 2,17 2,58 2,58 0,60 0,40 0,20-0,46 0,32 0,43 0,57 0,55 0,02 1,50 1,41 1,22 1,09 1,09-0,20-0,05-0,17-0,23-0,16 1,00-0,40-0,28-0,44-0,48-0,46-0,48-0,51 0,50-0,60-0,44 - Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q ,80 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q ,55-0,61-0,63-0,69 Q1-13 Q2-13 Q3-13 Q4-13 Retail Market Corporate Market Retail Market Corporate Market 9 Definition: The quarter's average customer interest rate minus average 3-month NIBOR

10 LIQUIDITY AND FINANCING - SHARE OF RM-LOANS TRANSFERRED TO SPAREBANKEN VEST BOLIGKREDITT: 53% Development assets Sammensetning likviditetsportefølje 3Q 2012 Development liabilities % 90 % NOK mill % 70 % 60 % 50 % 40 % 30 % 20 % - 4Q Q Q Q Q 10 % 0 % 2010 Q Q Q4 Q Debt to financial institutions and short term instruments State Banks Municipalities Corporate Covered bonds and swap arrangement with Norges Bank Hybrid capital (Tier 1) and subordinated debt (Tier 2) Covered Bonds Used as collateral in Norges Bank Senior debt 10

11 DEFAULTS AND OTHER POTENTIAL BAD DEBT Development in defaults* and other potential bad debt** (NOK million) in RM, CM and proportion of total volume of lendings*** (%) 11 *) Includes all defaults, not only default of payment **) Includes commitments with individual write-downs ***) Calculated as % of total volume of lendings

12 REDUCED OPERATING EXPENSES ALSO IN Q4 Change in operating expenses Q Q4 Operating expenses 4Q 341 Operating expenses 4Q Change in operating expenses in the quarter 231 Split as follows: Pension schemen plan change 313 Write-down of capitalised early-phase project costs -25 Provision for reorganisation Provision for reorganisation 30 Change in payroll and general administration expenses -14 Provisions for incentive schemes -29 Ordinary pension costs -15 IT costs -6 Other operating expenses 2 Total Sparebanken Vest The Group employed 60 fewer full-time equivalents as of 31 Dec. than on 1. Jan 12

13 POSITIVE COST TREND CONTINUES Reduced costs in both the parent bank and subsidiaries compared with 2012 Changes parent bank** Planned development* Development at 31 Dec. Change * 2 % 1.385* ,4 % Provision for reorganisation Provision for reorganisation 33 Payroll and general adm. expenses -22 Ordinary pension costs -36 IT costs 1 Other operating expenses Subsidiaries Parent bank** The parent bank employed 56 fewer full-time equivalents as of 31 Dec. than on 1. Jan 13 *) The 2012 figures excl. non-recurring effects related to pensions amounting to a total of NOK 301 million, plus bonuses in the parent bank. The planned development in the parent bank is excl. bonuses. All figures have been revised pursuant to IAS19R. **) Including Boligkreditt and excl. bonus

14 CONTINUED PROGRESS IN ASSOCIATED COMPANIES The companies pre-tax profit/loss (NOK mill.) Comments -4,7 96,3 Frende is still reporting good profit performance, combined with a strong growth in the number of customers and growth in premiums in both Frende Liv and Frende Skade. As a result of the considerable uncertainty surrounding regulations are a total of 45.1 million allocated in, relating to VAT on IT services from abroad. Norne has concluded the work of finding structural solutions and decided to carry out further development on its own. A new chief executive who will lead the company through the next phase was in place 1. Feb ,2 Brage Finans has worked purposefully and seen an improvement in profit performance. The improvement is due to growth in the lending portfolio, repricing and efficient operations. 28,9 Verd is showing a good development in profit performance due to increased customer interest rates and lower financing costs. The company issued bonds in the amount of NOK 2.5 billion in and met the bank s need for financing from the covered bonds market. 14

15 CONTRIBUTION TO PROFITS UP NOK 16 MILLION IN Associated companies NOKm Q4 Q Frende Forsikring Norne Securities Brage Finans Verd Boligkreditt Net profit from associated companies

16 FINANCIAL STRENGTH NEW HYBRID CAPITAL AND OWN FUNDS IN Q4 CAPITAL ACCUMULATION ACCORDING TO PLAN Basel I floor* IRB* 16 * The figures for the quarter include 50% of the accumulated profit after tax, with the exception of the fourth quarter

17 INCREASED CAPITAL REQUIREMENTS MET THROUGH OPERATIONS FORECAST FOR CAPITAL ACCUMULATION ICAAP Core Tier 1 capital, taking into account the Basel I floor, increases in step with regulatory minimum and buffer requirements Assumptions 14,0 % 12,0 % 10,0 % 9,6 % 10,6 % 11,2 % 11,2 % 10 % 11,7 % 12 % 12,4 % 13 % 13,0 % Margin assumptions as in Growth on a par with Retail market 6% Corporate market 2.5% 9 % 8,0 % Costs in line with cost targets 6,0 % Normalised losses (25 bp) 4,0 % 2,0 % 0,0 % 4 % 4 % Core Tier 1 Capital Basel I floor Estimate ICAAP Core Tier 1 Capital Basel I floor Combined minimum requirement and buffer requirement Core Tier 1 Capital Dividend policy maintained (50% / 5%) Sparebanken Vest required to have full buffer for important institutions (2%) in line with the Financial Supervisory Authority s recommendations Countercyclical capital buffer of 1% from 1 July 2015 despite lower level of activity in the Norwegian economy 17

18 THE BOARD S PROPOSAL FOR ALLOCATION OF PROFIT RETAINED PROFIT: 83.9% Calculation of basis for dividend 2012 Profit after tax, parent bank Increased funds for unrealized gains Dividend basis To owners of equity certificate 21.3%* s Retained earnings 78.7%* 2012 Proposed dividend / equity certificate (NOK) 3,00 2,50 Totalt dividend paid (MNOK) 95,3 79,4 Payout ratio 51,6 % 50,0 % 2012 Proposed gifts (MNOK) 40,0 35,0 Payout ratio 5,9 % 6,4 % 18 *) The dividend percentage has been stipulated pursuant to the Financial Institutions Act Section 2b-18. Adjustment for own equity certificates is not included in the calculation of the dividend percentage

19 STRENGTHENED ORGANISATION EQUIPPED TO MEET FUTURE REQUIREMENTS FROM BOTH OWNERS AND CUSTOMERS MANAGING DIRECTOR (Jan Erik Kjerpeseth) CORPORATE COMMUNICATIONS (Siren Sundland) HUMAN RESOURCES AND ORGANISATION (Gro Hatleskog) LEGAL/CREDIT (Pål Pedersen) RETAIL MARKET (Hallgeir Isdahl) CORPORATE MARKET Ragnhild Fresvik (Jan Hjellestad acting ) BUSINESS SUPPORT AND DEVELOPMENT (Bjørg Marit Eknes) FINANCE AND RISK MANAGEMENT (Frank Johannesen) Rationalisation of processes Clarification of responsibility for profit performance More performance and customer-oriented management 19

20 Business and industry is showing stable optimism and a high level of activity slight increase at the start of Main findings from Vestlandsindeks 1 /2014 The enterprises in Western Norway are marginally more positive about both the current financial situation and the future. Biggest positive change in expectations in Hordaland. Møre og Romsdal is again the county that scores highest on expectations, followed by Hordaland. In Rogaland, the index is unchanged from Q4, while it is slightly reduced in Sogn og Fjordane. Expectations are increasing most in shipping, transport and storage, followed by industry, power and oil recovery Q Q Q Q4 Past 3 months Q1 Q2 Q3 Q4 Next 6 months 2014 Q1 Slight increase in investments: 30% will increase investments in the next half-year. The employment rate in Western Norway is stable: 28% of businesses expect to increase the number of employees in the next six months. 20 Indeksen går fra skalaen Et tall over 50 indikerer optimisme. Et tall under 50 indikerer pessimisme. For mer se

21 OUTLOOK FOR SPAREBANKEN VEST Continued strong net interest income in 2014 Underpinned by repricing measures taken, low money market interest rates and the need for capital accumulation in the banks On schedule to reach target of 2% cost growth in the parent bank Associated companies contribution to profits is expected to increase in 2014 Sparebanken Vest will continue to work actively to ensure equal competitive conditions for Norwegian banks An uncertain macroeconomic situation could lead to a somewhat higher risk level in the region in the long term 21

22 WE ARE HERE.